Lessons of the Falling Wall

Commentary, Peter Holle, Role of Government

Not all vividly held public memories carry a patina of tragedy. Almost everyone remembers what they were doing when the Kennedys or John Lennon were shot or jets crashed into the World Trade Center. But etched into others, like D-Day or the moon landing, are positive, celebratory feelings. Today is the fifteenth anniversary of such an event, the collapse of the Berlin Wall and with it the historic intellectual error that created it.

Arguably the most important event of the 20th century, the crumbling of the infamous wall started on November 9th, 1989. The joy of the riotous demolition by surging crowds on both sides belied the promise of a stifling and elitist philosophy, and catalyzed its eventual collapse. This news struck home with me that sultry autumn day because, as a university student working in West Germany, I had witnessed the wall’s absurdity first hand.

During summer of 1980 I worked deep within the bowels of a potash mine near a little village that sat on the East German border. It was at the foot of what in 1946 Winston Churchill famously dubbed the Iron Curtain. It became a life-shaping experience, especially my solitary and haunting borderside hikes through a rolling, otherwise empty German countryside. Officially constructed to keep western interlopers from entering the German Democratic Republic, the wall mainly functioned as a deadly barrier to human movement in the other direction.

Beyond a concrete pylon marking the official edge of the “workers’ paradise” stood tall, barbed-wire fences, punctuated by watch towers with armed soldiers and video surveillance equipment. Occasionally there were automatic machine-guns attached to trip wires, originally designed for Nazi concentration camps. Next, a carefully combed strip of sand inspected daily for tell-tale footprints and other suspicious markings, that followed by a path for patrolling military vehicles. The locals also testified about more unpleasantry – land mines. I remember sipping tea one gloriously sunny afternoon at a quaint hilltop café overlooking this metaphorical divide between capitalism and socialism. We watched sinister looking crop dusters loop back and forth, spraying poison in a never-ending fight with the death strip’s encroaching meadows.

Many died trying to get out of East Germany.

Later that summer, I drove through it en route to Berlin, on the heavily controlled “transit corridor.” It was a regimented place with a high presence of Vopo’s – the Volks Polizei, or people’s police who kept meticulous tabs on the rhythms of local life. This centrally planned society shouted failure in its obvious impoverishment relative to West Germany. There were the shabby public housing tenements, the shops with spotty and empty shelves and the ruling class’s smoky ”crown corporation” made Trabant automobiles trundling noisily down pot-holed streets.

Despite its violent underpinnings, this was a grand and undoubtedly well-intended experiment. They really were trying to create a fair and equal society. After the wall came down, East Germany disappeared, along with the rest of the Soviet empire. Much better off today thanks to enormous subsidies that have hobbled Germany’s economy, the area is still haunted by its socialist ghosts. Even though memories of the Wall and its meaning are fading, its fall effectively ended the debate about government ownership of the economy and the utility of central economic planning.

It accompanied and accelerated a huge wave of privatization, started in the 1980s as governments got out of the business of owning businesses. The global economic earthquake triggered by the trend is still rippling out of China, as mothballed political enterprises release swarms of cheap labour into emerging, market-driven businesses, strong competition for manufacturers around the world. Here in Canada, to cite the best of many examples, an erstwhile crown corporation loser like CN Railways thrived in the marketplace, growing and expanding to dominate its industry, while paying taxes instead of saddling taxpayers with losses. Only a combination of hidden subsidies, legislated monopoly and political inertia sustain the remaining crown corporations that linger on.

Central planning does continue, if only in heavily politicized sectors of our society like the healthcare industry where, with great irony, Soviet-style line-ups for service are on the rise despite constantly increasing funding. But a combination of forces may soon put the squeeze on these low-performing policy models. Challenges like China and further tax reform in the U.S. will make the toleration of expensive, inefficient systems less viable. In response, we will have to lower taxes, the lifeblood of stifling government monopolies, and replace them with models driven by choice, competitive delivery and the sophisticated demands of consumers. Leaner government, lower taxes and free–trading, open borders now form the standard policy model in successful, free and dynamic societies.

Good intentions are no basis for making effective policy or creating a fair and equitable society. That’s the lesson I remember when I look at the piece of the Berlin wall that sits on a shelf in my study.